Proposed updates to the National Greenhouse and Energy Reporting (NGER) Scheme – 2025 Public Consultation

The Commonwealth Department of Climate Change, Energy, the Environment and Water is inviting submissions on the proposed amendments to the National Greenhouse and Energy Reporting (NGER) scheme and the NGER scheme forward work program.

The consultation is part of the annual review of the NGER scheme undertaken by the Department which aims to identify issues and implement relevant updates to the scheme following feedback from stakeholders. Every five years the annual update is also informed by the Climate Change Authority’s (CCA) review of the NGER scheme. The 2025 public consultation progresses some elements of the Government Response to the CCA's 2023 review of the NGER scheme.

The Department has released a consultation paper and exposure draft of the proposed 2025 updates to the National Greenhouse and Energy Reporting (Measurement) Determination 2008 (Measurement Determination). The amendments are proposed to start on 1 July 2025 and will apply to future NGER reports, commencing with those submitted by 31 October 2026 for the 2025–26 NGER reporting year.

Proposed amendments to the NGER Measurement Determination 2008

The Measurement Determination provides methods, criteria and measurement standards for calculating emissions and energy data. It covers scope 1 and 2 emissions, energy production and consumption. The Department is specifically seeking views on the practical operation and application of the following draft amendments proposed to the Measurement Determination.

Market-based reporting of emissions from consumption of renewable gas

The Department proposes to introduce a market-based method for estimating emissions from consumption of biomethane and hydrogen (renewable gas) that has been injected into the natural gas network. Under the current NGER accounting approach, renewable gas purchasers are only able to report consumption of the part share of renewable gas they physically consumed, determined in accordance with the pipeline operator’s determination or by sampling and analysing the fuel they physically receive. The proposed amendments are intended to enable full and exclusive attribution of the scope 1 emissions benefit from the reporters' renewable gas purchases, even if the gas they purchased is distributed through the natural gas network and physically consumed by multiple entities.

In addition, the Department proposes to introduce amendments, including:

• introducing rules for determining the amount of a renewable gas in a blended gaseous fuel received from a natural gas network;

• implementing renewable gas market-based reporting using renewable gas certificates which will provide a streamlined way of transferring claims to the scope 1 emissions attributes of renewable gas within shared networks;

• application of a loss factor to account for pipeline transport losses of renewable gas injected in the network; and

• reclassification of hydrogen as a fuel in place of the current classification as an energy commodity.

Fugitive emissions from oil and natural gas operation

Currently, the NGER scheme reporters have the option of estimating fugitive emissions from flaring in accordance with Methods 1, 2, 2A, 2B, or 3. Methods 1 and 2A provide emission factors for carbon dioxide (CO₂), methane (CH₄), and nitrous oxide (N₂O) to use in the estimation of emissions from gas flared and from crude oil and liquids flared. The Department proposes to update the emissions factors used in Method 1 and Method 2A for gas flared during oil and natural gas operations as the review identified an unintentional inconsistency between the emission factors across flaring sources in the Measurement Determination.

It is intended that the updates to the emissions factor will improve consistency and accuracy of gas flaring emissions factors across the Measurement Determination and align the NGER scheme with Paris Agreement emissions reporting requirements.

Other proposed amendments include:

• Making Method 2B available to natural gas transmission and distribution facilities;

• Introduction of additional "matters to be identified" (MTBI) which are required to be provided by reporters for Methods 2, 2A and 3 for gas flaring which would require facilities to report ‘the tonnes of flared gas’ which includes the total gas stream that moves through the flare stack (both hydrocarbons and inert gases).

Scope 2 emissions from consumption of electricity

The Department is proposing amendments to the voluntary market-based approach for reporting scope 2 emissions from the consumption of electricity. In particular:

• if a reporting entity uses the market-based method for a facility within a controlling corporation’s group, the Department proposes to make it mandatory to use the market-based approach for all facilities within a controlling corporation’s group that reported a location-based scope 2 emissions estimate from the purchase or acquisition of electricity;

• updating the definitions of RECsurr and REConsite to clarify that these renewable electricity certificates may be surrendered for the reporting year, prior to the submission of the NGER report, but do not necessarily need to be surrendered in the reporting year; and

• new MTBIs to allow for the verification of surrendered renewable electricity certificates for NGER scheme reporters required to report the surrender identification codes generated by the Clean Energy Regulator and accreditation codes for any accredited power stations within a facility.

NGER forward work program

The Department is also seeking feedback on the following areas of the NGER scheme forward work program for potential future updates.

Review of Method 2 for estimating fugitive emissions from open cut coal mines

From 1 July 2025, open-cut mines covered by the Safeguard Mechanism that produced more than 10 million tonnes of coal in 2022-23 are required to use Method 2 or 3 for estimating fugitive methane emissions. From 1 July 2026, all open-cut mines covered by the Safeguard Mechanism must use Method 2 or 3.

Method 2 estimates fugitive emissions based on the mine-specific methane content of the extracted coal. The CCA 2023 review of the NGER scheme recommended that the Method 2 sampling requirements and standards be reviewed. The Government Response committed to reviewing Method 2 to ensure it remains fit for purpose and based on the best available science, technologies and practices. The Department is now seeking views on areas of concern and opportunities for improvement that could be considered in the scope of the review.

Reporting scope 1 emissions for co-processed fuels

The Department is seeking stakeholder views on what amendments are required to better enable the reporting of scope 1 emissions from combustion of co-processed fuels in the NGER scheme. New market-based arrangements for reporting scope 1 emissions from the combustion of renewable liquid fuels after they have been co-mingled with their fossil fuel equivalents and supplied through shared infrastructure were initially introduced in July 2024.

Scope 2 emissions

The Department is considering how to recognise the Renewable Electricity Guarantee of Origin (REGO) under the NGER scheme and how REGO can be incorporated into the voluntary market-based method for a future NGERS update. The REGO scheme is currently being developed by the Clean Energy Regulator in partnership with the Department and is expected to allow participants to create renewable energy certificates for all types of renewable energy production. The proposed REGO certificate mechanisms will be voluntary and builds on the large-scale generation certificate (LGC) framework under the Renewable Energy Target.

The Department is also considering measures to address the risk of double claiming where the location and market-based methods for reporting scope 2 emissions are inappropriately combined or presented together in contexts outside the NGER scheme. Particularly, the Department is considering amendments that would require facilities that sell LGCs from onsite renewable generation production and consumption to apply the market-based method in addition to the mandatory location-based method to prevent the facilities from also claiming the emissions benefit of LGCs they have on-sold.